Wednesday, June 29, 2011

There are 45 comments on the state of Rick Kordowski and his website Solicitors from Hell on a page detailing a judge's latest suggestion about what should happen to Kordowski. It seems the judge suggested that the Law Society and the Bar Council should consider taking action against the website. To that end they have consulted Hugh Tomlinson QC (Mr SuperInjunction--much beloved by footballers who can't make up their minds about which sleeping partner is au courant) of Matrix Chambers. A class action might be in the wind. It better stay there. Kordowski has no money. And maybe it's the clients' fault.

I was put in mind of this when reading an article by Simon Jenkins in the Guardian with the strap line: "The higher civil service, once the government's purring Rolls-Royce, has been taken for a joy-ride by the great professions." He follows this with Shaw's aphorism, "All professions are conspiracies against the laity." All the radical changes promoted by the UK government are being thwarted by self-interested professionals.

Doctors object to changes that would privatize the National Health Service, lawyers object to the huge proposed reductions in legal aid that would leave many without legal remedy, teachers and lecturers object to evisceration of schools and colleges. Jenkins is unable to discern other motives for their actions. Oh well, let him witter.

Richard Moorhead's recent report on the YouGov research for the Legal Services Board on legal complaints showed there was a sizeable proportion of complainants, around 33% of respondents. And most of those were to do with delay and poor service. In other words lawyers must do better. Until they do, websites like Solicitors from Hell will persist as well as individual ones (eg. www.cwd-critic.com). It doesn't matter how badly written they may be, they nevertheless express an exasperation, a frustration that must be dealt with. Their complacency will begin to disappear when competition hots up later in the year.

Saturday, June 18, 2011

City law firms are ticked off because government legal procurement doesn't seem to be going their way. Legal Week reported on government's reliance on one or two firms for its banking crisis work, well, mostly one--Slaughter & May. During the Northern Rock crisis it billed government £20 million in fees.

However, what really intrigues me are the comments following the article. They represent the polar extremes of formalism and professional responsibility. My take is that lawyers are superb at avoiding accountability but then their forensic training ensures they make these distinctions. For example, the way the SRA Code of Conduct is used to justify positions is rather like the way evangelical preachers on TV use quotations from the Bible. In a country where legal ethics is not properly taught, now is the time.

I've added the comments below:

Sick

I think that lawyers are the last people who should be moaning about this since they were partly responsible for causing the financial crisis and have never been punished for it. The law is not just something for partners to make money out of – it was designed as a system to govern and protect society. That includes lawyers involved in corporate and banking law.
In respect of the complex financial products and mechanisms that were created during boom times e.g. securitisation etc and the complex deals that took place, it was the responsibility of lawyers to advise their clients that these could end up in a financial crisis scenario. The lawyers should have been alert to the fact that, although operating in a soft law type environment, these deals were harmful to principles such as market confidence, protection of the consumer, as well as protecting the system as a whole. It was the lawyers' duty to deter the clients from conducting these deals and they should have reported their concerns to the Government, FSA and international bodies and refused to act for the client. A client may well think these deals are smart, but it is for the lawyer to consider the legalities – that does not just mean loyally making it happen for the client so they can bill and buy an Aston Martin, but also looking at the bigger picture.

So City lawyers are reaping what they have sown here. And if lawyers wish to argue that they could not anticipate the financial crisis then that is more reason to say they are responsible and should be brought to book because it would be negligent for any lawyer advising on finance deals to not have a firm grasp and understanding of economics related to the deal and how the deal fits into the economic system as a whole within that economic climate (e.g. a boom period).
And £20m is sick – why on earth don’t the government deal with this in-house, probably at 1/10 of the cost? And why are these firms on any kind of a panel in which they initially advised on the deals and the institutions that went belly up? This is another example of the David Cameron 'jobs for the boys' mentality that the current Government promote (i.e. work for the Eton and Westminster School alumni, stuff the rest). It is a total disgrace.

Megatron -16 Jun 2011 | 13:13

A few facts

Megatron
Clearly facts aren't your strong point, but the panel was created by your friends in the last government. Do you remember? The ones who set up the system of financial services regulation and who advocated "light-touch" regulation. The ones who virtually bankrupted the country. Do try to retain some grasp on reality.

Rant over -16 Jun 2011 | 14:59

Cleansing the Augean Stables

Megatron,
Let's get it all out in the open. Where were the lawyers when the Japanese earthquake struck, eh? Didn't they warn Tepco about the risks of water-cooled reactors?
What about Southern Cross? Shouldn't they have predicted the squeeze on local authority spending and refused to act for Blackstone on the freehold sales?
When Cardigan ordered the charge of the Light Brigade, shouldn't the lawyers have known what would happen and injuncted the Russian guns?
I'd be interested to hear your thoughts.

Scattergun -16 Jun 2011 | 15:34

@Megatron
I can only assume that you are not a lawyer. If you are a lawyer then you clearly weren't listening in your conduct classes. Rule 1.04 "You must act in the best interests of each client." Not in the interests of the country. Nor of the government. Nor of Mrs Miggins.
Your duty as a solicitor is to help your client achieve its aims within the law. It is not and never has been a professional duty of a solicitor to second guess his client's commercial decisions and aspirations or to place his own value judgments about a transaction's social utility above the interests of his client. Those are the responsibility of financial regulators, not solicitors in private practice.
Your position is just a commercial law version of the old canard put to criminal lawyers: "How on earth can you defend rapists/paedophiles/armed robbers etc?" And the response is just the same: they are entitled to legal representation and their lawyers are bound to act to the best of their abilities in the client's interests (and not society's at large). It's a fundamental premise of the rule of law.

Vercingetorix -16 Jun 2011 | 18:17

Maths

@ Vercingetorix
I don’t think you are a lawyer either to be honest based on what I just read. Lawyers are not allowed to represent rapists and paedophiles if they are guilty and then try to claim they are innocent. I think you are missing the point. FSMA said that financial institutions had to act in the interests of market confidence, protection of the consumer, as well as protecting the system as a whole. Therefore, law firms had to assess whether the deals breached those rules and if they did (which clearly they did) they should have refused to act for the client and reported to the FSA and Treasury that financial institutions were conducting deals and activities with huge systemic risk implications. So, these deals were not "within the law" (as you claim) otherwise there would not have been a financial crisis would there?
As for quoting the code of conduct by the SRA to justify City firms' oversights in regard to those deals. Please! The SRA is protectionist toward large City firms – They wouldn't dare invent a Code that might in any way, shape or form offend a City firm.
Also @ Vercingetorix - I think it was stated that the law was "not designed" in the interests of City firms and partners. I don’t think people like Plato really put much though into creating a legal system designed to help partners get a good PEP every year!
The incompetence of the lawyers point is interesting too. How could these lawyers spot systemic risk dangers? Many of the clients (i.e. employees of these banks) have very technical and high level economics and mathematics degrees. There is no way the majority of lawyers working on those deals have anywhere near those intelligence levels. There is an argument that the lawyers were not trained properly to work on those deals (from an economics perspective) and that their knowledge was limited to working with precedents and writing board minutes. This should fall at both the door of the advising partners and the SRA / Law Society for allowing lawyers to act on deals that they don’t have the technical expertise to understand.

Maths -17 Jun 2011 | 10:13

@Maths
Where in my post did I say lawyers could assert innocence on behalf of clients they know to be guilty? I didn't.
But even if they do know of a client's guilt, they still defend their client. It is quite possible to test the prosecution's evidence and find it wanting such that a client is acquitted without ever asserting a client's innocence. It happens every day in criminal courts up and down the country.
You really were asleep in your ethics classes weren't you?
As to the rest, you seem to be completely confused as to the difference between a City solicitor and a financial regulator. One is not the other.

Vercingetorix -17 Jun 2011 | 12:39

Maths

Time to re-read FSMA, Maths. The FSA has those obligations ("objectives" in fact), but financial institutions do not.

Sarpedon -17 Jun 2011 | 12:46

reality check

Reality check: the regulators should have regulated. Or worst case the banks should have seen what was coming. Legal advisers advise on, shock horror, legal issues. Financial institutions advise on, shock horror, financial issues. Admittedly there is some crossover, but to assert that lawyers shouldn't be working on deals that they don't 100% understand from an economic perspective is frankly absurd and highlights a 'bash the banker/lawyer' attitude promulgated by a government that fundamentally failed to protect the economy.
People are out for themselves. It is the responsibility of the government to check this, unless something is actually unlawful (which everything referred to above was not, it was merely inadvisable). If it were unlawful, only the government could have made it so.

reality -17 Jun 2011 | 14:56

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A friend sent me another picture of a lawyer at work which I thought I'd include here. Indeed, it's quite accurate....

Friday, June 03, 2011

According to the New York Times law firms are upping sticks and hiking across the invisible boundary line that divides civilization from the savages. They're moving from the East Side of NYC across Fifth Avenue to the West Side!

It would be like London law firms moving from the City to Dalston, Hackney, where it's so hip it hurts:

(By the way, two guys tried to sell a Banksy, stuck to a 4 ton wall, on TV last night. They wanted £300,000 for it and turned down £240,000--fools!)

I think the West Side has a bit of catching up to do......

West Side's good but it is getting on a bit now.

Dalston's got its super, whizz-bang new tube.

It's also got a new roof garden park which is just a tad smaller than the High Line, but we've got to start somewhere. So what's keeping the law firms?

Wednesday, June 01, 2011

The accountants are desperate to have some form of accountant-client privilege and the Institute of Chartered Accountants of England and Wales have applied to be intervenors in the Prudential case before the Supreme Court. The Law Society has already been given permission to intervene.